All Topics / Finance / Borrowing power calculators

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  • mattnz
    Participant
    @mattnz
    Join Date: 2007
    Post Count: 574
    April 26, 2009 - 4:17 am

    I am building up a portfolio of wrapped properties and I am trying to calculate if at some point in the future I will reach a limit in borrowing capacity.

    I am expecting that in the next couple of months I will have 3 wrapped properties providing an average of $500 per week in payments each, for a cost to me of approximately $300 per week each, so they have great positive cashflow of $30k plus in total for the 3 properties (plus significant depreciation benefits). My base salary is $120k.

    When I enter these figures into a borrowing power calculator it says that I can obtain a loan of around $900k. My question is, does that mean that on top of my existing loans which are serviced through the $300 per week each I am already paying, that
    1. I am eligible for a further $900k in loans, or
    2. that in total across all of my mortgages I am only allowed a total of $900k in loans, despite each property adding greater positive cashflow?

    If scenario 2 is actually the case, how do I work around this issue?

    Thoughts please, Paul, Richard and co?

    Thanks,
    Matt

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    April 26, 2009 - 7:31 am

    Matt

    If the calculator asks you to put in your existing liabilities and you enter these then the 900K is the additional borrowing amount.

    I am suprised you found too many lenders agree to finance a wrapped property in the current climate.

    Richard Taylor | Australia's leading private lender

    mattnz
    Participant
    @mattnz
    Join Date: 2007
    Post Count: 574
    April 26, 2009 - 7:41 am

    Thanks Richard, appreciate the input.

    That is really great news then, I am actually increasing my borrowing capacity with every wrap I do. :)

    I have tried 2 lenders, after checking with their head office,  one said yes, so I placed a deposit on the property, then they later said no they couldn't after all. After a lot of discussion they have said they will look at it, but want to review the contracts and get lawyers and credit experts involved. Too much hassle to go through every time I want to do another deal.

    I went to another lender and they have said yes, no problem, so it is looking likely that I will go with them.

    I wasn't sure how I was going to get on either, but I am being advised that I can do it by my mortgage manager at the second bank so I will take it. :)

    Cheers,
    Matt

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